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Regarding the Amazon Clouds

by Administrator on June 5, 2014

The Cloud Storage Motel where every room has full dial-up InternetI received an email today from someone who attended one of my sessions at IBM Edge in which I said something disparaging of public cloud services generally and mentioned Amazon specifically.  He said that he didn’t recall exactly what I said, but since his firm was considering using Amazon for some services, he wanted to know my concerns.  I decided to turn the request into a formal post here, just so I can be flamed by all of the AWS and S3 fanboys out there.

First, let me say that I am an equal opportunity cloud service doubter.  I do not single out Amazon, Google or anyone else.  I am not a big public cloud fan at all, of any vendor.

My concerns about Amazon’s cloud services fall into two categories.  First, are the concerns I have with all public clouds, particularly the storage clouds.

  1. Regardless of the efforts cloud vendors make to deliver on their SLAs, they are at the mercy of the WAN that connects them to their customers.  WANs are subject to latency, jitter, outages, and other vicissitudes that can interfere with the delivery of SLA compliant services to the consumer.  Therefore, expectations of cloud service levels must be reduced.
  2. From a storage standpoint, offering capacity at a nominal $.12 per GB per month may seem cheap, but they aren’t when you consider annual costs for storing lots of data, plus unadvertised costs for accessing that data, moving that data, deleting that data, etc.
  3. Soon, we will see extremely high capacity hard disks and tape enter the market whose areal densities will enable consumers to store their data locally for significantly less money than what it would cost to use a cloud service, even if they are replicating that data to facilitate protection and sharing.  We are talking .000002 cents per GB on a 40TB HD within a couple of years.  So, I am not sure that the pricing model of the storage clouds is any more sustainable than the old SSP model in the late 1990s.

The second category of concerns I have relate to the failure of consumers to take proper steps to insulate themselves against the possible failure of their preferred cloud service provider.

  1. In the early 1980s, when disaster recovery “hot sites” became all the rage (shared subscription-based data center facilities for use in a disaster recovery situation), there was a fellow running around selling bogus hot site subscriptions.  He took everyone’s money and split to a tropical country with pretty beaches and no extradition treaty with the USA, where he lived happily ever after.  Today, very few folks are checking the pedigree or facilities or claims of their public cloud service provider — perhaps not such a big deal with respect to Amazon, but maybe a big concern with the myriad service providers that have crawled out of the woodwork during the Cloud Hype Cycle…
  2. I also look at what happened with Nirvanix, especially to companies with petabytes of data stored with the #3 storage cloud provider at the time who were given 10 days to move their data out of the cloud — without any access to tape or to adequate network pipes for doing the transfer.  Heck, Fox News had tens of petabytes at Nirvanix and even if they had access to an OC192 pipe, the max transfer rate they could have achieved would have been 10TB every 2.25 hours.  Good thing though, since they are often accused of not being a fact based news outfit, maybe they really didn’t need their data back.  At a minimum, if you want to use cloud storage, make sure they have tape for use in returning your data to you.

And actually, one last concern I have with Amazon and others is a simple one of market viability:  The cutthroat pricing in this market, evidenced by Google’s recent price cuts aimed at Amazon, will eventually cause a race to the bottom in terms of service pricing that will again reveal an unsustainable business model for most service providers.  The market analysts I talk to tell me that AWS hasn’t had a profitable quarter since opening its doors.  While we lionize the bosses there as uber-Capitalists, I wonder about the longevity of the business.

That’s my answer to the email question.  Thanks for writing.

{ 1 comment… read it below or add one }

zapper June 6, 2014 at 4:41 pm

Thank you for saying the same things I’ve been telling people for the last year or so.

I would also like to point out that it is my belief that Amazon only got into the cloud business because after start of the 2008/2009 economic crisis they, Amazon, were left with excess resources. Considering that by selling Cloud Services they reduces losses on already existing capacity, it was probably, and still is for the short term, a win/win environment for them.

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